Games Medicare Plays – Why are Physicians Still Playing?

Kaiser Health News published a report recently on Medicare’s “incentive” program payments to hospitals. The most obvious observation is that most hospitals will not see any meaningful incentive payments, due to the carrot-and-stick methods employed by Medicare. A very telling statement comes from consultant Eric Fontana, a Washington-based analyst at The Advisory Board Company- When all these incentive programs are combined, the average bonus for large hospitals — those with more than 400 beds — will be nearly $213,000, while the average penalty will be about $1.2 million. The penalties come from hospital readmissions and hospital-acquired infections.

The report’s author, Jordan Rau, further comments “On top of that, Medicare this year also began docking about 200 hospitals for not making enough progress in switching over to electronic medical records.” What Mr. Rau fails to mention is that these electronic medical records have to be government-approved; any other electronic record does not count.

Furthermore, Medicare added an “Efficiency Measure” to the mix this year. This measure is figured out this way – Federal officials calculated what it cost to care for each hospital’s average patient, not only during the patient’s stay but also in the three days before and a month after. I love the term “average patient”. I would love to hear how these federal officials characterize the average patient.

A 3-year analysis by Kaiser Health news found that “out of 2,672 hospitals that have been evaluated in all three years of the program, roughly a quarter got bonuses all three years and a quarter lost money in all three years. The rest had a mix of bonuses and penalties“.

In summary, this data confirms my initial theory that this is a game with a 25% probability of winning. Yet 100% of hospitals try to be in that 25% group! I may not be very bright when it comes to math, but if this was a table game in Vegas, this table would be an empty one! So far, this game has not been proven to help patients, and it certainly does not make business sense. So why do hospitals and physicians continue playing this game?

Perhaps the answer lies with the “consultants” like those mentioned in this article, The Advisory Board Company, Avalere Health, and many others, who have created a new industry of “consulting” born out of excessive government and third party payer mandates. My own experience with such companies is that they come up with fancy presentations dangling the proverbial reimbursement carrot in front of salivating administrators and physician-leaders, without fully explaining the “stick” parts of the deal.

These consulting companies collect handsome paychecks and most frequently recommend laying off hard-working, experienced hospital staff as part of cost-cutting measures, usually resulting in reduced quality of care. But they are experts in developing “metrics”, which have somehow taken over as the gold standard evidence of medical care.

In these consultants, we have added another set of useless middlemen to the healthcare equation, without questioning the reason for them being there in the first place. It is time to pause, and ask some honest questions about why there are so many unseen yet influential bureaucrats, consultants, administrators, businesses, and lobbyists crammed into the exam room instead of just patient and doctor. It’s time to question the very rules of the rigged game we’re being asked to play.

Oh my God, you describe my Hospital to a tee! Getting rid of the experienced doctors and nurses for the freshly minted box checkers. Creating new ” teams” of minions to respond to all the Joint Commission/CMS mandates. All of us ” oldies ” are gnashing our teeth and pulling out our collective scalps trying to figure how we can retire or otherwise get out of this clusterf@ck, scared to death that we will be victims of this nonsense in the coming years as we get old and die.